TRIS Rating Co., Ltd. has affirmed the rating of True Multimedia Co., Ltd. (TM), formerly known as Asia Multimedia Co., Ltd. (AM), at "BBB" and has also assigned "BBB" ratings to TM's two tranches of senior secured debenture totalling Bt1,300 million. The rating outlook remains "stable". The ratings reflect TM's secured position under the lease contract as the provider of network transmission for United Broadcasting Corporation PLC (UBC) group, which is the leading pay TV company in Thailand; favourable growth prospects for the data communications business; business synergy from True Corporation PLC (TRUE) Group, and its acceptable financial profile characterized by high profit margins and adequate cash flow. TM's debt increased substantially after receiving debt transferred from its parent, Telecom Holding Co., Ltd. (TH), in 2003. TM's management has already set a policy of not accepting additional debt from related parties, which is reflected in the indenture of the debentures. The covenants in the debentures also prohibit the company from providing or accepting additional debt from TRUE group. These strengths are partially offset by the threat of substitution from alternative forms of transmission, customer concentration risk, and intense competition in its new line of business: data communications.
The "stable" outlook reflects TM's ability to generate stable cash flow and favourable growth prospects from its data communications business. The outlook is also based on the expectation that its parent will not transfer any debts or obligations to the company in the future.
TRIS Rating said that the ratings also take into consideration the credit quality of TM's ultimate parent, TRUE. In addition to the cross-shareholding arrangements among TM, UBC, and TRUE, TM is considered a crucial infrastructure provider for UBC and TRUE group. TM presently acts as the key provider of network transmission service for UBC. As a subsidiary of TRUE group, TM benefits from bundling its services with product offering by other group members. TRUE offers its clients fixed line service, wireless, Internet, and multimedia, bundled together with service from TM. TRIS Rating has also taken TM's dependency on its ultimate parent into account in the ratings. - End
True Multimedia Co., Ltd. (TM) Company Rating: Affirmed at BBB Issue Ratings: TM083A: Bt1,100 million senior secured debentures due 2008 BBB TM093A: Bt200 million senior secured debentures due 2009 BBB Rating Outlook: Stable